Jerome Powell’s Crucial Comments for the Cryptocurrency Market
Jerome Powell’s Caution for the Financial Markets
Jerome Powell, Chairman of the Federal Reserve, recently made statements that carry substantial weight for the financial markets, including cryptocurrencies. His comment, “I would not note we have achieved a soft landing yet,” reflects ongoing caution from the central bank amid economic recovery efforts.
Powell’s Risk Management Mode
Additionally, Powell’s admission to being in “risk management mode” to avoid acting too hastily or too belatedly, coupled with the expectation to dial back the policy rate this year if the economy evolves as projected.
Implications for the Cryptocurrency Market
These remarks from Powell are critical for the cryptocurrency market because they indicate that the Federal Reserve is still striving to navigate the economy toward a state where inflation is under control without triggering a recession.
Significant Implications for Risk Assets
The implications for risk assets, like cryptocurrencies, are significant. Cryptocurrencies are often viewed as a hedge against inflation and can be sensitive to interest rate changes, which influence the cost of capital and risk appetite on the broader market.
Bitcoin’s Current Review
Bitcoin is currently facing resistance at the $42,500 level, with key support at approximately $39,000. A break below this support level could signal a short-term bearish outlook, potentially testing further support near $35,975. The moving averages suggest a consolidating market, and the RSI, hovering around the midline, points to a neutral momentum.
Potential Impact on Bitcoin’s Price
A dial-back in policy rates might lead to an increase in risk appetite, potentially driving Bitcoin’s price to retest resistance levels. The next resistance stands near the $42,500 level, and a breach here could see Bitcoin targeting the $46,000 zone.
This article was originally published on U.Today.
